Yesterday, 5/22/10, I sold 4 S May10 5 Puts for a net deposit of $314.94 in an IRA account.  My basis for these S shares if put to me would be 4.21.

I already own 400 shares of Sprint with May10 Covered Calls at the $5 strike price on them.  My basis for the existing shares is a lofty 16.59.  I really don’t want them called away so I guess I am hoping that I am assigned the Puts that I just sold.  Doing so will greatly reduce my basis to somewhere around $12.  While still underwater, that is much better than my current position.

If Sprint turns out to be above $5 by May option expiration I will just need to roll out and hopefully up my existing Covered Calls.  I will still be happy with the premiums from the Put sale.  J

S&P has a 12 month price target of $5 for Sprint.  Jim Cramer featured Sprint this week.  He has a thesis that Sprint stands a very good chance of benefitting from an upcoming iPhone release that should allow Sprint to provide service for them.  At least that is what I understood him to say.  Jim expects Sprint to report better cash flow and that will cause analysts to upgrade it which in turn will cause it to rise.  He suspected a move to over 5, possibly to 6 in the next few months.  You can see some of his comments at the following link.  If the link does not work directly just cut and past it into your browser.

http://www.thestreet.com/video/10733498/mad-money-recap-sprint.html?puc=_yahooplayer&s=1#79531631001